The initial public offering of Chinese gadget giant Xiaomi seems to has raised considerably less cash than it hoped.

Bloomberg reports that Xiaomi priced the IPO on the Hong Kong exchange at the lower end of its expected range, resulting in a mere $4.7 billion being raised and pricing the company at around $54 billion, far less than had been hoped at the start of the year.

Bloomberg spoke to James Yan of Counterpoint Research, who offered the following analysis: “Xiaomi’s exceedingly thin margins from hardware significantly drags down its valuation for potential investors. I expect it to invest more in the smartphone unit, especially on international expansion. It also needs cash to beef up its ecosystem in markets like India. All those fronts are extremely capital-intensive.”

Another apparent hit on investor enthusiasm was Xiaomi’s decision not to do whatever the equivalent of an IPO is in China for whatever reason. This in turn meant it was going to raise less money and thus be able to reinvest less, hence reducing its investor appeal.

Xiaomi has done a great job of reclaiming market share it lost a year or so ago (see below), but the mere fact it had to do so is a reminder of how volatile the smartphone market is. Combine that with the company’s apparent Apple-style reliance on a captive installed base to flog other stuff to and the great job companies like OnePlus are doing of competing with it directly and you can see why the investment case is far from clear cut.